Home affordability has slipped below the historical average in more than half of U.S. counties, reaching its highest level in two years, a report from Attom Data Solutions said.
Median prices of single-family homes and condos in the second quarter are less affordable than historical averages in 61% of counties across the nation with enough data for Attom to analyze, up from 52% in the first quarter and
On the other hand, of the 569 counties in the report, 222, or 39%, are more affordable than their historic affordability averages in the second quarter, down from 51% of the same group one year prior.
Too much is happening in the short-term to determine what direction the housing market will move, Attom's chief product officer Todd Teta said.
"The near future of affordability remains very uncertain, as it has throughout the pandemic," he stated in a press release. "For the moment, the situation is a mix of positive and negative trends."
Attom determines affordability for average wage earners by calculating the income needed by homeowners to meet monthly expenses — including mortgage, property taxes and insurance — on a median-priced single-family home, taking into account a 20% down payment and a 28% housing costs only debt-to-income ratio.
Using that calculation, median home prices in 347 of the 569 counties analyzed in the second quarter were less affordable than past averages. That was up from 275 of the same group of counties one year prior. The number of counties with enough data to be analyzed can vary each quarter.
The 22% year-over-year spike in
Still, using that DTI metric, home prices remained manageable, Attom said. Major ownership costs on the typical home consumed 25.2% of the average national wage of $63,986 in the second quarter, up from 22.7% in the first quarter and 22.2% in the second quarter of last year. This is currently at its highest point since the third quarter of 2008.
"Average workers across the country can still manage the major expenses of owning a home, based on lender standards," Teta said. "But things have gone in the wrong direction this quarter in a majority of markets as the national housing market boom roars onward."
In 242 counties, or 43% of those surveyed, home buyers had to have more than 28% of the annualized local weekly wages to afford a typical home in the second quarter.
The counties that require the greatest percentage of annualized weekly wages to buy a home were: Kings County, also known as the borough of Brooklyn in New York City at 100.8%; Marin County, which is north of San Francisco, at 81.4%; Santa Cruz County, in the Central Coast region of California, at 76.2%; Queens County in New York City at 68.7% and Monterey County, which adjoins Santa Cruz, at 65.9%.
